Operator: Good afternoon, ladies and gentlemen, and welcome to OMV Petrom's earning call. Today's presentation will last around 30 minutes and will be recorded. By now, you should have received the presentation by email. The slides and the speech are also available online on www.omvpetrom.com in the investors section. These also include the cautionary statement regarding forward-looking statements. Now, let me hand over to Simona Crutu, Manager of the Investor Relations and Stakeholder Engagement Department, who will moderate the event.
Simona Crutu: Good afternoon, ladies and gentlemen, and thank you for joining us. We will have a presentation followed by a Q&A session. Christina Verchere, Chief Executive Officer, will provide the key highlights about the macroeconomic and regulatory environment, as well as our operational performance in Q3. Alina Popa, Chief Financial Officer, will give you more details on our financial performance and a brief outlook. Afterwards, they will be available to answer your questions. We recommend you to register for the Q&A session during the presentation by pressing star one one on your telephone keypad. You can also register during the Q&A session itself. I am now handing over to Christina.
Christina Verchere: Good afternoon, ladies and gentlemen, and a warm welcome to our conference call that will take you through our performance in Q3 2026. Let me first draw your attention to our legal disclaimer, which you can read in detail on slide two. In Q3 2026, we delivered robust operational performance supported by our integrated business model, despite a volatile and challenging market and geopolitical environment. At RON 2.8 billion, our Q3 Clean CCS operating result was more than double year-on-year, with improved results in all three business divisions. Our operating cash flow in Q3 2026 was 67% higher year-on-year at RON 3.7 billion. The Clean CCS return on average capital employed reached 16 percentage points.
Christina Verchere: Before going into details on each division, I would like to highlight our focus on high availability and utilization of our assets, as well as efficiency and optimization of our operations. In R&M, we had an excellent utilization of our refinery at 100%, and refined product sales increased by 10% year-on-year. In Gas and Power, the Brazi Power Plant net electrical output was 3% higher year-on-year, covering 12% of Romania's electricity production over the quarter. In E&P, our unit production cost improved by 6%, reflecting our cost reduction efforts and also a favorable foreign exchange effect. During Q3, we further focused on delivering on our 2030 strategy. I would like to start by confirming to you that our strategic project, Neptun Deep, is on track, and we will have more details on the next slide.
Christina Verchere: We are also advancing with our renewable power projects, moving decisively from project-based execution production. Out of our more than 1.3 gigawatts planned by 2030, around 65% has already passed the final investment decisions. As announced yesterday, we have reached around 100 megawatts in operation. All these figures are net to OMV Petrom. In addition, as part of our power storage strategy to build over 300 megawatts by 2030, in Q3, we signed the engineering procurement and construction contract for a battery energy storage system to be installed at the Ișalnița Solar Farm, the first large-scale solar project wholly owned by OMV Petrom. The battery storage facility will have installed capacity of 20 megawatts and is expected to be completed in around 7 months from the signing of the contract.
Christina Verchere: We are also progressing on our journey to become the first major producer of renewable fuels in Southeast Europe. Our SAF/HVO project is progressing as planned, with a goal to be onstream in 2028. Construction is progressing across key work fronts, including equipment installation and pipe rack rehabilitation. For the green hydrogen facilities, all 11 electrolyzer modules and stacks have been delivered and installed, with medium-voltage cable installation and connections completed. Electrical substation installation is progressing with all equipment delivered and installed. In the next months, we will handle utilities hookup, testing, and commissioning to gradually start operation soon after. The green hydrogen component benefits from EU funding with around €50 million non-reimbursable grant received from the National Recovery and Resilience Plan in Q2 and Q3 of this year. In HSSE, the total recordable injury rate for the rolling period, October 2025 to September 2026, was 0.46.
Christina Verchere: Moreover, we continued our efforts to reduce greenhouse gas intensity with projects on all three business segments. Neptun Deep Project is a strategic investment for OMV Petrom and for Romania. With around €4 billion of development CapEx, the project is expected to deliver approximately 140,000 barrels of oil equivalent production per day at plateau for nearly 10 years. As communicated during our recent capital markets day, project execution is progressing well and has now reached almost 90% of the total progress. We have now completed 8 of the 10 development wells and are targeting first gas in H1 of next year, with plateau production by end of Q3 2027. The offshore platform has been installed, drilling is ongoing, pipeline to shore is installed, and onshore works at Tuzla are progressing.
Christina Verchere: The next phase focuses on completing subsea connections, testing, commissioning, and final readiness checks before production starts. Let us now take a look at the evolution of commodity prices in Q3 2026. The persistent conflict in the Middle East and attacks on regional energy infrastructure has led to unprecedented volatility in global energy markets. After starting the quarter at around $68 per barrel, Brent price rose sharply, reaching a peak of $132 per barrel in mid-September. Although prices later moderated as export disruptions were partially mitigated, the price remained elevated at around $120 per barrel by the end of the quarter. For Q3, average Brent price was $97 per barrel, up 40% year-on-year, but 7% lower quarter-on-quarter. Markets for some oil products have also been particularly affected, especially those for diesel and jet fuel, both reaching again record high quotations.
Christina Verchere: Thus, OMV Petrom indicator refining margin exceeded $41 per barrel on average in Q3 on strong gasoline and diesel crack spreads in the context of higher pricing environment, as well as the result of the geopolitical tensions in the Middle East, as well as Russian ban on diesel exports. The indicator refining margin impact is partly offset by higher crude supply, logistics, and insurance costs triggered by the geopolitical context. European gas prices remained at high levels, still volatile in Q3, reflecting geopolitical uncertainty, evolving supply conditions, and continued demand to replenish storage ahead of winter. In Q3 2026, the safe price averaged €65 per megawatt hour, up 80% year-on-year and 36% quarter-on-quarter. Gas prices on the Romanian centralized market increased at a lower extent, as the country has less direct exposure to disrupted global LNG supply.
Christina Verchere: Day-ahead prices averaged around €58 per megawatt hour, up 71% year-on-year and 24% quarter-on-quarter. Baseload electricity prices in Romania increased by 60% year-on-year and 36% quarter-on-quarter to an average of €149 per megawatt hour. The average CO2 price increased by 9% quarter-on-quarter, reaching €82 per ton. Looking now at the Romanian macroeconomic environment, the latest available data shows that GDP decreased year-on-year by 0.6% in H1 2026. In October, the IMF reduced its projected GDP growth for Romania for 2026 to a -0.5% from a +0.7%. IMF forecast for 2027 Romanian GDP growth was also revised down to 2.2% from 2.5% in the previous estimate. The consumer price index for the month of September 2026 versus September 2025 was 6.6%.
Christina Verchere: While the base effects from last year's electricity price cap removal in July and tax increases in August should support an easing, inflation remains the highest in the European Union. In its latest projection report, the National Bank of Romania expects inflation to rise further in Q4, which would lead to an upward revision of its full-year forecast. Looking at the Romanian energy sector in Q3 2026, based on our internal estimates, the demand for our products was mixed. Demand for retail fuels was 2% higher year-on-year, remaining resilient despite higher prices, also supported by a shift of wholesale customers to retail chains amid constrained product availability. Commercial fuel demand fell by 11% year-on-year, also reflecting weak economic activity and structural demand adjustments to persistently higher fuel prices. Gas demand decreased by around 5% year-on-year, with declining consumption from both industrial and household consumers.
Christina Verchere: Power demand was 6% lower year-on-year, while domestic production also decreased by 6% year-on-year. Romania was a net importer of power in Q3 of both 2025 and 2026. The contribution from solar, wind, and gas increased year-on-year, while production from nuclear, coal, and hydro sources decreased, in part due to significantly low water levels in the Danube River. In the context of the Middle East conflict at the end of July 2026, the Romanian Parliament agreed to reinstate the crisis situation for the oil and fuels market. The law is applicable for a period of 3 months, from 7 August to the end of October. It provides for capping the retail commercial margins at the 2025 level, adjusted with inflation for the gasoline and diesel sold in Romania. No cap on refining margin is applied.
Christina Verchere: It also provides for a solidarity tax calculated using a progressive tax rate, depending on the average monthly diesel or Brent quotations, whichever results in a higher rate. For Q3, this translated into amount of RON 266 million, reflected as a special item in, and roughly equally split between, E&P and R&M. The law also introduced a dynamic excise reduction mechanism between 5% and 25%. A draft government decision aiming at extending the applicability of the regulation by 3 months, until 31 January 2027, was published for consultation this week. On the gas market, the regulations for households and heat reduction for households remains in place until March 2027, but with a more limited scope compared to the period before April 2026.
Christina Verchere: As a result, the percentage of our gas sales subject to regulations decreased to 5% in Q3 of this year from around 69% in Q3 of last year. We continue to emphasize that free market principles are essential for fostering investment, and that any market interventions should remain temporary and directly rooted to vulnerable customers. Let me now move to the performance of our division, starting with Exploration and Production. Clean operating results in E&P increased by 168% year-on-year, reaching RON 1.2 billion in Q3. This was mainly driven by higher hydrocarbon prices, favorable foreign exchange effects on revenues, and lower production costs, partly offset by higher royalties and gas supplemental taxes and lower sales volumes.
Christina Verchere: Hydrocarbon production in Q3 decreased by 6% year-on-year, mainly due to natural decline and impact from different maintenance schedules, partly offset by the contribution of workovers and new wells. The production cost per barrel of oil equivalent improved by 6% year-on-year to $17, reflecting lower costs, mainly lower expenses with personnel, services, and energy, as well as favorable foreign exchange. For the full year 2026, we estimate the Brent oil price to be above $95 per barrel. We expect to produce more than 100,000 barrels of oil equivalent per day with no divestment impact considered. We continue our cost management measures, aiming for a production cost similar to last year in the context of persistently inflationary pressures and unfavorable foreign exchange trends. Alina will provide more details on CapEx later.
Christina Verchere: In Refining and Marketing, the Clean CCS operating result almost doubled year-on-year to RON 1.6 billion in Q3 2026. This result reflected exceptionally high refining margins and high refinery utilization. These were partly offset by a lower contribution from sales channel margins, reflecting our moderate pricing policy in the context of regulatory interventions with caps at 2025 levels. Refining product sales were 10% higher year-on-year. Retail volumes increased by 6%, more than the market demand. Non-retail sales volumes were 18% higher on increased commercial sales as a result of higher equity product availability compared to Q3 2025. For the full year 2026, given the developments on the international market, we estimate the indicating refining margin to be above $20 per barrel.
Christina Verchere: Current market disruptions may lead to a widening of crude oil differentials to dated Brent, which is not reflected in the refinery indicator margin, nor in the full-year sensitivities. The refinery utilization rate is estimated to be above 95%, in line with our strategic targets. We estimate demand for retail fuel products in Romania to be stable year-on-year and our retail fuel sales to be higher. For total refined product sales, we also anticipate an improved year-on-year performance due to expected higher equity product availability in a year without a planned shutdown. In gas and power, the Clean CCS operating result increased by 46% year-on-year, mainly from a stronger power business. The gas business delivered a positive result, although below the prior year level in the context of lower sales volumes and increased turnover taxes linked to higher gas prices.
Christina Verchere: We achieved an excellent result from our power business built on improved results from the Brazi Power Plant, benefiting from favorable market conditions and a slightly higher net electrical output. In addition, improved margins were achieved from volumes bought from third-party sources. For the full year 2026, we expect demand for gas to be stable year-on-year and the demand for power to be slightly lower. Our total gas sales volumes are envisaged to remain broadly flat. Our net electrical output is expected to be slightly higher than in 2025, despite a longer planned shutdown. Please let me now hand over to Alina for more details on the financial results of the Q3 2026.
Alina Popa: Thank you, Christina, and good afternoon also from my side. I will continue our presentation with slide 11, starting with some highlights on the income statement and also presenting key developments in our cash flow statement. Group Clean CCS operating result more than doubled year-on-year, reaching RON 2.8 billion, with improved results in all three business divisions. The clean consolidation line was -RON 77 million in the Q3 2026, mainly reflecting the margin elimination for gas quantities injected into storage, as well as the higher unit margins for crude and fewer products in stock, despite lower crude and fewer products inventories. For the Q3 2026, we recorded inventory holding gains of RON 111 million due to crude oil price evolution. We recorded net special charges of RON 106 million in the Q3.
Alina Popa: This includes the temporary solidarity contribution due for the Q3 in total of RON 266 million, partially offset by net temporary gains from derivatives. For comparison, in the Q3 2025, we recorded net special charges of RON 170 million, mainly related to impairment in Exploration and Production segments. The net financial result was a loss of RON 94 million compared to a gain of RON 466 million in the Q3 of the previous year. The Q3 2025 included the one-off effect related to a positive outcome from a litigation. As a result, in the Q3 2026, the net income attributable to stockholders was RON 2.3 billion. The 0.5% tax on turnover amounted to around RON 85 million for the Q3 2026, mostly booked in the Refining and Marketing segment.
Alina Popa: As for the 0.5% tax on constructions, we accrued in Q3 around RON 19 million, mostly in the Exploration and Production division. The tax for the entire year 2026 amounting to around RON 75 million was fully paid in May. With regard to our cash flow statement in Q3 2026, the cash generated from operating activities before net working capital changes was RON 3.5 billion. For comparison, the amount requested in Q3 of the previous year was RON 2.8 billion. Working capital changes led to a cash inflow of RON 165 million in Q3 2026, compared to a cash outflow of RON 621 million in Q3 2025. The cash inflow reflects higher liabilities, mainly related to increased taxation driven by the solidarity contribution and higher E&P taxes. These were partly compensated by higher receivables and inventories.
Alina Popa: The increase in receivables was mainly related to amounts to be received from our joint venture partners. Inventories increased mainly due to higher costs for petroleum products following the increase in crude oil prices, as well as gas injection into storage. Overall, the operating cash flow in Q3 2026 amounted to RON 3.7 billion, 67% higher than in Q3 2025. Our net payments for investing activities amounted to RON 2.1 billion, mainly reflecting a cash outflow for organic CapEx of RON 2.5 billion and RON 0.3 billion grants received for the green hydrogen plant. The net cash position, including leases, decreased to RON 2.8 billion at the end of September 2026 versus RON 5.7 billion at the end of September 2025. Moving now to slide 13.
Alina Popa: Total CapEx for the first nine months of 2026 at RON 6.6 billion was 27% higher year-on-year. More than 70% of this amount was spent in Exploration and Production, mainly for Neptun Deep project, as well as for drilling 18 new wells and sidetracks and performing more than 410 workover jobs. In Refining and Marketing, investments increased by 46% to RON 1.5 billion, mainly for SAF/HVO projects. In Gas and Power, we invested RON 406 million, 62% higher year-on-year, reflecting the progress of the renewable power portfolio. For the full year 2026, the GSM was convened on 6 November to approve an increase of the CapEx budget for this year, mainly due to different investment phasing in Neptun Deep project.
Alina Popa: The total cost estimated for Neptun Deep project remains broadly unchanged, and we expect first gas in the first half of 2027. Overall, subject to the GSM approval and assuming a predictable and competitive regulatory and fiscal environment, we plan net organic CapEx of around RON 10 billion. Additionally, potential inorganic CapEx is estimated at up to RON 0.4 billion. To conclude our presentation today, let's take a look at our outlook for 2026 on slide 14. We have presented already our expectations for the relevant business segment indicators for 2026. In the context of a better market environment, and despite higher planned investments this year, we now expect free cash flow before dividends to be broadly neutral, building on our results for the first nine months. We are closely tracking global developments and continuously evaluating the impact on our business.
Alina Popa: The assumptions and targets for the period 2027/2028 are currently under review as part of our annual mid-term planning process. Given the increased visibility in Neptun Deep project schedule, we updated the average production for the years 2027/2028 to more than 140,000 barrels per day. We are confident that our strong financial position and integrated business model will help us navigate in this volatile environment. With this, we conclude our presentation, and thank you for your attention. We are now available for your questions.
Simona Crutu: Thank you, Alina. Let me remind you that if you want to ask a question, you need to press star one one on your telephone keypad. We will now pause for a moment to assemble the queue.
Operator: We will now take our first question from Oleg Galbur from ODDO BHF. Please go ahead.
Oleg Galbur: Good afternoon, and thank you for the presentation and congratulations on the strong results. I have several questions. My first one relates to the agreement on the royalty adjustment, which has not yet been implemented. Now that Romania has a new government, when would you expect these agreed changes to take effect? Secondly, given the continued volatility in refining margins, could you please tell us what average indicator refining margin did you have in the month of October? How much of the indicator margin is Petrom effectively capturing after accounting for crude differentials and logistics costs? Thirdly, could you please provide more details on the increased 2026 CapEx? I understand that part of it is due to the shifting of Neptun Deep CapEx from 2027 to 2026, but I wonder how much is also driven by higher investments in low and zero-carbon project, as you mentioned.
Oleg Galbur: Thank you.
Christina Verchere: Thank you, Oleg, and thank you for joining us today. I will take your first question with regards to license extension, which comes with the royalty adjustment. Alina will come to the refining margins and your 2026 CapEx question. As you know, at the end of last year, we signed a set of principles with the Romanian state with regards to the extension of the onshore and Petromar licenses. Then we progressed quite a lot of it, but with the change and not having a government in place, obviously things stalled at the decision-making level. Things were continuing to work at the technical level, and now that we have a government in place with the decision-making capabilities needed, we will be looking to move this forward as fast as we can.
Alina Popa: Hello, Oleg. Also from my side, going to your second question, on the October refining indicator margins, what we see at least until today is quite strong refining margins, somewhere around $22 per barrel in October so far. Going to the second part of your question, indeed, refining margin indicator is just an indicator and in today's environment doesn't capture the full reality. What we see is that the crude premiums to Brent are significantly higher than what we have experienced in the past. This is mainly due to higher freight cost and also higher insurance premiums. What I could indicate is that we see these premiums somewhere between three to five times higher than what we would be in normal times. This means that these crude premiums reduce our real-life refining margin by comparison with refining margin indicator.
Alina Popa: Moving now to your third question, if we look into the recent CapEx increase for 2026, this is driven mostly by Neptun Deep project. Here we talk about different phasing and moving from 2027 to 2026. There is also a little bit there, some movement from 2025 to 2026, tighter. There is also some exchange rate effect when we look into the RON-denominated budget, which is subject to our general meeting of shareholders. Overall, most important for project like Neptun, we remain in broadly EUR 2 billion CapEx for Neptun, as we have announced that we will have for first gas in the first half of next year. When it comes to LCB, there is nothing significant there in terms of CapEx increase.
Oleg Galbur: Thank you very much, Alina. If I just may ask, is there any chance to get a feeling of what was the, or what is the differentials in the normal times, differentials to Brent?
Alina Popa: Yeah, it is quite sensitive information. We have discussed a bit. We do not provide this information, Oleg.
Oleg Galbur: Totally understood. Thank you.
Operator: Thank you. We will take our next question from Jonathan David Lamb from Wood & Co. Please go ahead.
Jonathan David Lamb: Good afternoon. Thanks for the presentation. I have a couple of small questions. One, your gas sales were down in the quarter compared to last year, and also your regulated gas sales were down a lot. I understand that was partly due to regulatory changes, but did you actually reduce your sales so as to sell more to the free market? Or is this because you sent more to Petrobrazi? Or what was the reason for the drop?
Alina Popa: Could you say all the questions, Jonathan, and then we-
Jonathan David Lamb: Right. Okay. The other thing, there was news the other day that you have three new renewable power plants online. What is your expectation for production from them in the next quarter? Is there anything else? I know you have lots of things in the pipeline. Is there anything else that is coming on soon?
Alina Popa: Mm-hmm. Okay. Thank you for. Is that it? Or, Jonathan, do you have a third question?
Jonathan David Lamb: No, that's it.
Alina Popa: That's it. Okay.
Alina Popa: Coming to the gas sales, you indicated correctly, the main reason for lower gas sales in Q3 this year versus last year is really lower regulated sales.
Alina Popa: Which basically triggered for us lower sales overall. There is nothing else significant that I could mention otherwise. When it comes to the renewables, indeed, we are having a lot of activities there. It's still small in size, so I would not expect.
Alina Popa: that you see something really significant in terms of numbers. That would be expected rather 2027, but rather 2028, to be honest. We indicated
Alina Popa: with our capital markets what will be the rest impact, somewhere around EUR 100 million in 2030 as EBIT impact,
Alina Popa: while we have all the projects coming on stream. But next quarter, still small.
Jonathan David Lamb: Yeah. Okay. All right. Thank you.
Alina Popa: Thank you.
Operator: Let me remind you that if you want to ask a question, you need to press star 1 1 on your telephone keypad. We will take our next question from Oleg Galbur from ODDO BHF. Please go ahead.
Oleg Galbur: Thank you. I have a follow-up question on the Romanian macro environment, because you mentioned that you see quite a weak economic environment in Romania, and I was wondering which areas of Petrom's business and earnings do you see as most exposed to this weak economic environment?
Christina Verchere: I think it's a great question. I think what we've actually seen, if you even just see what's happened this year, is that demand for fuels has stayed stronger than we expected, given what's going on. Although we have seen on the industrial side, some impact there. At the same time, there's still quite a lot of investment happening in the country with regards to the construction side, the road side, because of the EU funding coming in. So that's a kind of slight balancer to that overall.
Alina Popa: Mm-hmm. Yes. I would add, if we look into the fuels, what you can see is that our retail sales and our total sales overall increased more than the market. This is in the context of a market distortion generated by this regulatory. Also, looking at the nature of our company, integrated company with the dual brand approach, what we see is a movement from OMV sales rather to more Petrom sales. Correlated with our moderate pricing policy, we see that basically this translated into higher sales for us, despite a weak environment overall, where basically we increased our market share. All in all, if we look at this year, demand for retail fuels and gas is expected to be stable, while power demand is expected to be slightly lower.
Christina Verchere: Mm-hmm. Just pulling back, I think it was a very important thing actually, to see a government put in place. I think we have seen actually that the rating agencies have been able to hold the investment grade. I think this has been important. We know that actually getting a government in place, really making and looking at the fiscal agenda of the country has been quite important to that. We know that is a key priority for this government as it comes in as well, and I think this will be a part of what does the economic environment look like going forward. Let's see how that unfolds, Oleg, but it was an important step forward here.
Oleg Galbur: Thank you. That's very useful. If I may, an additional question on the regulatory environment. The impact of this solidarity tax in Q3 was at the level of RON 266 million. I understand that it depends very much on the levels of crude oil and petroleum product prices. In the current price environment, so far in October and what you expect for Q4, would it be fair to assume a comparable level of solidarity tax or still it can be significantly lower versus what has been reported for Q3? Thank you.
Alina Popa: Yes. What we see, Oleg, is that it was put in public consultation, a draft, which basically is prolonging the same terms, meaning the same, what we have until now, which will indicate that in the similar price environment, we will have similar impact overall. That's not yet approved, but it is a draft government decision that is public right now. You have all the details. It depends on oil price and diesel quotations, and you can do simulations depending on how you see the quotations evolving.
Oleg Galbur: Understood. Thank you.
Operator: Thank you. We will take our next question from Irina Răilean from Mosaiq8. Please go ahead.
Irina Răilean: Good afternoon, and thank you for the presentation. My question is regarding the gas market and how do you see this deregulation starting April next year, given now that we have a government that says something like there will be gradual deregulation. What can we expect from a gradual deregulation in your understanding? And how in general are you adapting your commercial policy or updating your gas contracts? Under what assumptions?
Irina Răilean: What available quantities do you forecast, or do you see a total deregulation starting April? Or what factors do you take into consideration? Because for now, it is quite uncertain, but you still need some available quantities. The second one, also regarding the gas market, is how correlated are your contracted gas prices compared to what is happening on the international markets, and how much of that growth is OMV Petrom capable to capture starting first gas year from 1 October?
Alina Popa: Thank you, Irina. Let me try to answer your question. When it comes to the gas market, clearly we advocate for a free market. Free market principles are so important for developing our country and investments and so on. We understand the need of intervention for vulnerable consumers, but the principle overall, it is free market. The regulation in place right now is until the end of Q1 next year. We will not speculate on what could happen, but it is clear view on our side that free market environment is the best basis for investments. When it comes to gas contracts, yes, this is the challenge we are living in, that we need to navigate through times of uncertainty where you do not know exactly what will happen and so on.
Alina Popa: We have a great sales team, all I can say, and they are used to volatility and uncertainty in the way they approach their gas contracts. When it comes to the second question on the gas prices, what we have experienced in Q3 was a bigger delta difference between the BRM, the Romanian spot gas market, and CEGH. This was primarily driven by disrupted LNG supply, which affected the CEGH prices much more than our BRM. We have seen a difference of 6, 7 EUR per megawatt, which is much higher than what we have experienced in other times, where they were much more correlated. When it comes to our realized price, we do not disclose our realized price, but we say they are broadly in line with the Romanian market for the unregulated quantities, of course. I hope this helps.
Irina Răilean: Okay. Thank you. One follow-up question regarding our gas market. I saw the volumes on the BRM are quite low compared to the overall market, let's say. How useful do you see now, how relevant are those prices for the overall market given the small liquidity of the BRM compared to the whole market or whole gas consumption?
Alina Popa: Mm-hmm. It always depends, but there is a certain correlation, I would say, overall. With gas-
Alina Popa: it is always depending on when you do the contract, when you deliver the gas. It is more complex, the gas market, than otherwise, because if you have a contract done a year ago with a price, it could be very different-
Alina Popa: than a contract done now for the next month. It is quite more complex. The way this comparison can be done, you look at tail head, you do look at contract signed in the period. But there is a correlation. This I can confirm. Not a perfect correlation, but quite a high correlation overall.
Irina Răilean: Thank you very much.
Alina Popa: Welcome.
Operator: Thank you. We will take our next question from Daniela Mândru from Swiss Capital. Please go ahead.
Daniela Mândru: Hi. Hello, everybody, and thank you for the presentation. I have only one question regarding dividend. With this year, the free cash flow before dividends now expected broadly neutral, how should we assess the capacity for a special dividend alongside base dividend and the remaining net funding requirement? Should we see scope for a substantial special dividend?
Alina Popa: Thank you, Dana, for the question. Our dividend policy remains unchanged, and what is relevant there is that the relevant indicator is operating cash flow. So you look at operating cash flow that you estimate for this year, and then our dividend guidance says that dividends overall, the base dividend to special dividend, should be above 40% of operating cash flow of the previous year. That's the principle. We have a base dividend which should be increasing, being higher than the previous year. We also indicated there 5% to 10%, but going further to that, to your question around special, you can see by depending on your estimation of operating cash flow this year, what would be the second part around special.
Daniela Mândru: Okay. Thank you.
Simona Crutu: As there are no more questions, I want to thank you for taking part in our conference call. For further information, please do not hesitate to contact the investor relations team. Until our next call, we wish you all the best. Thank you.
Irina Răilean: Thank you.
Operator: That concludes today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.
